Wells Fargo has been honing their credit card products since Charlie Scharf took the helm. Almost this time last year, we noted the ex-Citibanker’s view on the Wells Fargo credit card operation, as quoted in the San Francisco Business Times:
Scharf didn’t mince words when asked bout Wells Fargo’s competitive position in credit cards. “When you look at what we do as a card company, the fact is our card propositions are not competitive with what is viable today in the marketplace.”
The Wells Fargo Active Cash card was a good start last July, putting Wells on par with many top issuer offerings, but their recent alignment with Bilt Rewards looks like a game-changer.
According to the press release:
The first-of-its-kind co-brand credit card allows members to pay rent and earn points with no transaction fees on rent payments at any rental property in the U.S.
Through this innovative new partnership, renters across the country will now be able to earn unparalleled rewards that can be redeemed towards travel around the world, access to their favorite fitness classes, and even credit towards a down payment on a home.
The public launch of the Bilt Mastercard marks the first time renters can earn rewards on the collective $500 billion spent nationwide in the U.S. each year on rent, without the transaction fees historically charged by properties.
With the Bilt Wells Fargo Mastercard, the market is open for 2 million rental homes that allow consumers to earn competitive reward points for their monthly obligations. Consumers can select travel rewards, create an option to squirrel away funds for a house downpayment or choose from various options.
The rewards structure, detailed in the press release, is:
- $0 annual fee.
- 1X Points on Rent: Earn 1x points on rent payments (up to 50,000 points each year)
- 2X Points on Travel: Earn 2x points on travel booked directly with airlines, hotels, cruise lines, and car rental agencies. Travel benefits and features include trip cancellation, auto rental collision damage waiver, Lyft credits, and no foreign currency conversion fee.
- 3X Points on Dining: Earn 3X points whether you’re at your favorite restaurant, lounge, or ordering in. Plus, get access to a 24/7 reservation concierge and DoorDash discounts.
- 1X Points on Other Purchases: Earn 1X points on other purchases, and enjoy premium benefits like cell phone protection, purchase security, auto rental collision damage waiver, etc.
For buildings that do not accept credit card or digital payments, cardholders pay their rent through the Bilt App, and a check will be sent to landlords on the cardholder’s behalf.
Some verticals avoid accepting credit card payments because of the interchange required for the transaction, but the check-tied card is a novel workaround.
So, if you live in SFO, where the average apartment rent is $3,244, or even in Charlotte, where rents average $1,522, this card can be a winner.
But for Wells, the Bilt card is a leap into the co-branded card space, where they have only one other card, the Hotels.Com card. And it is an indication of their recommitment to the U.S. credit card business.
Overview by Brian Riley, Director, Credit Advisory Service at Mercator Advisory Group